The chairman Federal Reserve, Ben Bernanke, said yesterday the economy has emerged from its anemic spell, but overall growth for the year will be lower than expected. Inflation remains the chief concern, he said.

Delivering a midyear economic report to Capitol Hill, Mr. Bernanke struck a somewhat cautious tone. He suggested that the economy appears likely to expand “at a moderate pace” over the second half of the year.

The Fed chief told the House Financial Services Committee that growth this year will be slower than the Fed projected in February mostly due to the housing slump. Growth, however, should strengthen a bit next year, he said. The inflation forecast wasn’t changed. It calls for prices other than food and energy to edge lower.

Against this backdrop, the Fed is likely to leave interest rates where they are through the rest of this year. “They aren’t moving,” the chief economist at PNC Financial Services Group, Stuart Hoffman, said.

For just over a year, the Federal Reserve has held a key interest rate at 5.25%, providing a period of stability to borrowers. Before that, the Fed had boosted rates for two years to fend off inflation.

On Wall Street, stocks fell. The Dow Jones industrials closed down 53 points, after having slid as much as 134 points during the session. Investors reacted uneasily to Mr. Bernanke’s assessment of the economy and news that two Bear Stearns Cos. hedge funds were essentially worthless.